Paul Atkins Crypto Clarifies: Most ICOs Are Not Securities

Paul Atkins, former SEC commissioner, recently clarified that most crypto initial coin offerings (ICOs) should not be treated as securities. His statement gives much-needed guidance to investors and developers navigating U.S. crypto regulations.

Atkins explained that ICOs tied to network tokens, digital collectibles, and digital tools do not fall under the SEC’s jurisdiction. Only tokenized securities, which promise profits from the efforts of others, are considered securities. Other types of tokens now shift under the oversight of the Commodity Futures Trading Commission (CFTC).

What This Means for Crypto Projects

ICOs have become a common way for blockchain projects to raise funds. Investors buy tokens to access services, use platforms, or participate in a network. Before Atkins’ clarification, many teams feared that issuing tokens could automatically classify them as securities.

Now, projects with functional tokens can operate with more confidence. Developers can design tokens that serve a purpose on their network without worrying about SEC rules. As a result, the industry may see more innovation and experimentation.

For investors, this clarification reduces uncertainty. They can evaluate tokens based on use cases rather than assuming all ICOs face the same legal risks. Legal experts suggest teams may focus more on token functionality to ensure compliance.

The CFTC’s Role

Tokens that do not qualify as securities fall under the CFTC. The commission oversees commodities like Bitcoin and Ether and monitors trading to prevent fraud or manipulation. It ensures markets remain transparent, fair and orderly.

By clearly splitting responsibilities between the SEC and CFTC, regulators aim to protect investors while allowing innovation in the crypto space to continue and grow responsibly.

Looking Ahead

Atkins’ statement could reshape the crypto landscape in the U.S. Blockchain startups now have clearer guidelines for issuing tokens. Investors can better understand what type of regulatory oversight applies to their holdings.

This distinction also highlights a more practical approach to regulation. By separating investment-focused tokens from functional tokens, regulators can focus resources where they matter most.

Ultimately, Paul Atkins crypto remarks signal a more balanced future for crypto regulation. Developers and investors alike can move forward with greater clarity. Meanwhile, regulators can target genuine securities without stifling innovation.